Reformed tobacco taxation can fetch Rs240b more taxes: Experts

ISLAMABAD    -   Health advocates have proposed a 37 percent increase in taxes on tobacco products in Pakistan in order to reduce consumption, increase revenue and bridge the gap in health costs associated with smoking.

According to them, this proposed increase would translate into a substantial rise in government revenue, estimated to reach Rs336 billion from the current Rs240 billion from the tobacco industry. The intervention would also significantly impact health costs associated with smoking, projected to be reduced from Rs615 billion to Rs418.2 billion, effectively reducing the gap between revenue and health costs to Rs 82 billion.

Malik Imran Ahmad, Country Representative Campaign for Tobacco Free Kids (CTFK), said that the effectiveness of high tobacco taxation as a vital measure in combating tobacco consumption, as advocated by the WHO. The IMF and World Bank have recommended Pakistan to introduce a single-tier tax structure for cigarettes. Despite efforts to increase taxes, low cigarette prices persist, contributing to sustained high consumption levels.

Mehboob-ul-Haq, Chief Executive Officer at the Human Development Foundation (HDF), underscored the immense benefits of boosting tobacco taxation, stating, “Tobacco taxation is a globally recognized and effective tool to reduce affordability and consumption.” He stressed the urgent need for stringent regulation of all tobacco products, reaffirming HDF’s steadfast commitment to forging a healthier and more prosperous Pakistan, where the well-being of our youth is paramount.

Muhammad Asif Iqbal, Managing Director of the Social Policy and Development Centre (SPDC), said that as a result of the recent hike in the FED on cigarettes and the corresponding increase in prices, cigarette consumption has declined by 19.2 percent.

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